Inspection conclusion at VEAM Corporation

13:39 | 21/05/2019

On May 16, the Ministry of Industry and Trade announced Inspection Conclusion No.3202/KL-BCT about the management and usage of capital and assets as well as the production and business activities of Vietnam Motors and Agricultural Machinery Corporation (VEAM).

There have been numerous cases of mismanagement at VEAM and its subsidiaries. Source: vneconomy.vn

In the document, the Ministry of Industry and Trade (MoIT) stated that in the period between 2010 and June 2018, in spite of producing profit in its annual consolidated business reports, revenue mainly came from joint venture companies like Toyota or Honda.

Meanwhile, the inspection uncovered inefficient production and business activities at other business units under the management of VEAM, leading to reduced profitability or even losses.

The management and administration at VEAM and its members feature many errors and shortcomings. Specifically, the inspectors found many violations in the staff organisation, management, and use of capital, assets or debts, causing damage and wasting state assets.

The MoIT also transferred documents to the Ministry of Public Security (MoPS) to clarify and handle violations following the law.

In 2018, VEAM achieved a revenue of VND7.047 trillion ($306.4 million), which mostly came from joint ventures with Ford, Honda, and Toyota Vietnam.

Formerly known as 1-member State Company Limited, VEAM operates under the MoIT under the parent company-subsidiary company model. It was established on May 12, 1990 with the central goal of promoting the industrialisation of Vietnam's mechanical industry and the modernisation of agriculture and rural areas.

VEAM currently holds 30 per cent stake in Honda Vietnam, 20 per cent in Toyota Vietnam, and 25 per cent in Ford Vietnam. Each year, VEAM receives trillions of VND in dividends from these joint ventures.

In January 2017, the company changed to a joint stock model with the charter capital of VND13.288 trillion ($577.7 million).